To hasten or delay? 2020 brings important decisions

In the past few years I have written a piece about the year ahead in mid-January. 2019 was dominated by elections, with India, Indonesia, Nigeria, United Kingdom and South Africa going to the polls. Five countries with a population together of two billion people, leaving aside the Canadian, Australian and many other smaller country elections.

2020 will be dominated by one big election. The 59th quadrennial presidential election in the United States (US) will be held on Tuesday 3 November. While every US election is enframed as being both critical and pivotal, I suspect that is very true of this one.

2020 will be an important year for international tax rules. At the end of last year at least, it was intended by the Organisation for Economic Cooperation and Development (OECD) that a refined Consultation Paper on Pillar 1 (reallocation of market residual profit to market countries) and Pillar 2 (global minimum taxation) would be released early in 2020. Progress on this will be evaluated by the Steering Group of the Inclusive Framework at the end of January with a view to determining next steps. Clearly the views of the US will be critical in the nature and pace of progress. OECD Centre for Tax Policy and Administration Director Pascal Saint-Amans has previously indicated that he would like a position to be finalised in mid-2020. If consensus cannot be achieved in that time, it is possible that the matter will be deferred until 2021.

The Roman poet Ovid said:

“At times it is folly to hasten at other times, to delay. The wise do everything in its proper time.”

Here the proper time is what the major countries will allow it to be. But in the meantime, there are now 15 enacted direct tax measures for the taxation of digital services and another 16 countries with drafts or proposals for such a tax.

This year is likely to bring focus on the aging and the aged. The Retirement Income Review is due to report in June. This will be followed by release of the fifth Intergenerational Report in July and the Royal Commission into Aged Care Quality and Safety is due in November. Hopefully this will provide a mechanism for greater forward thinking.

So welcome to 2020. It is the United Nations (UN) Year of Plant Health, the World Health Organisation (WHO) Year of Nurses and Midwives and the Chinese Year of the Metal Rat.